My Lords, I will concentrate, as is my wont, on the macroeconomic implications of the Budget. That is not to say that supply-side questions are not important—of course they are. I agree with the noble Lord, Lord Maude, that a Government should not be exempt from the efficiency expected of the private sector. However, in general, efficiency is closely related to investment. The more investment there is, the more efficient an economy is likely to be, for the simple reason that there will be much less resistance to cutting costs—which in practice usually means laying off workers—if there are plenty of alternative jobs available.

We have 1.4 million people out of work—“too many”, the Chancellor rightly says. Continue reading →

LONDON – Sociology, anthropology, and history have been making large inroads into the debate on immigration. Homo economicus, who lives for bread alone, has, it seems, given way to someone for whom a sense of belonging is at least as important as eating.

This makes one doubt that hostility to mass immigration is simply a protest against job losses, depressed wages, and growing inequality. Economics has certainly played a part in the upsurge of identity politics, but the crisis of identity will not be expunged by economic reforms alone. Economic welfare is not the same as social wellbeing.

LONDON – With all the protectionist talk coming from US President Donald Trump’s administration, it is surprising that no one has mentioned, much less sought to invoke, an obvious tool for addressing persistent external imbalances: the 1944 Bretton Woods Agreement’s “scarce-currency clause.”

LONDON – Who runs the European Union? On the eve of Germany’s general election, that is a very timely question.

One standard reply is, “The EU’s member states” – all 28 of them. Another is, “The European Commission.” But Paul Lever, a former British ambassador to Germany, offers a more pointed answer: Berlin Rules is the title of his new book, in which he writes, “Modern Germany has shown that politics can achieve what used to require war.”

David Kynaston’s Till Time’s Last Sand reveals how the Bank’s relationship with government—from the gold standard to the Crash—have shaped the nation’s economy since 1694

David Kynaston is a wonderful social historian, with three massive volumes on post-war Britain and many others to his name. He has been a leading practitioner of “history from below,” reflecting the experiences of ordinary people. He has now turned to telling the story of one of Britain’s most powerful and mysterious institutions—the Bank of England, from its founding in 1694 up to 2013.

I don’t want to say too much about Nicky Kaldor’s actual stylised facts, but about the methodological implication of the stylised facts approach. Paul Samuelson famously said, “those who can do economics, do it; those who can’t, babble about methodology”. Kaldor could certainly do economics, but he needed a methodology to enable him to do what he wanted to do. This is my excuse for babbling.

VLADIVOSTOK – Russia’s Baikal-Amur Mainline (BAM) railway “can be hardly named as a popular tourist attraction,” says one tourist website of the some 2,000-mile railway traversing Eastern Siberia and the Russian Far East. “Most people even never [sic] heard of it.”